Businesses are adopting Artificial Intelligence faster than ever, but their insurance has not kept pace. From AI-related discrimination claims to inaccurate AI-generated recommendations, a growing number of companies are discovering that their professional liability policies exclude coverage for the new tools they have come to rely on. Counterpart, the leading Agentic Insurance platform, today announced the expansion of its Affirmative AI Coverage and the addition of a Technology E&O Insuring Agreement to address these emerging risks across its Miscellaneous Professional Liability (MPL) and Allied Health products.
AI adoption among small businesses has surged, with 92% now using AI in some form, primarily for research, marketing, and customer support. Automated decision-making tools have quickly become part of daily operations, improving efficiency but also amplifying risk. Research from Harvard Law’s Forum on Corporate Governance found insurers are increasingly writing exclusions for AI-related risks and automated decision-making, leaving many businesses exposed.
“AI-related risks are rapidly evolving. Coverage is by no means guaranteed by traditional E&O, D&O, Cyber, and CGL policies, which are ‘silent’ on such exposures and may be mitigated through AI-related exclusions or other policy limitations. To avoid any potential gap in coverage, companies should consider affirmative cover for the concentric circles of AI-related liability,” said Ommid C. Farashahi, Insurance Coverage Partner at BatesCarey LLP.
For many insurers, AI is still a gray area. Coverage is often silent, leaving business owners unsure about how their policies actually respond to these growing exposures. Counterpart’s Affirmative AI Coverage removes that uncertainty by directly addressing errors generated from first and third-party AI tools.
The stakes have never been higher for professionals using AI to deliver their services. Consultants faced claims after delivering reports with AI hallucinations. Insurance agents and financial advisors are facing disputes when AI-assisted risk assessments misclassify exposures and projections, leading to client losses. In human resources, companies face allegations of hiring discrimination, with recent lawsuits targeting hiring platforms that use biased AI decision-making.
“AI risks have moved from theory to the courtroom,” said Mike Muglia, Professional Liability Lead at Counterpart. “A lot of small business owners and startup leaders are using AI to work faster, process more information, and deliver a higher level of service, but they don’t always see the liability that comes with it. These endorsements give our brokers practical solutions for claims that come from everyday AI use, whether it’s bad outputs, decision errors, or machine-generated bias. As more businesses rely on AI to run and grow, these risks are only becoming more common.”
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